(a)The Secretary shall prescribe by regulation standards for the safeguarding and use of obligations that are government securities described in subparagraph (B) or (C) of section 3(a)(42) of the Securities Exchange Act of 1934. Such regulations shall apply only to a depository institution that is not a government securities broker or a government securities dealer and that holds such obligations as fiduciary, custodian, or otherwise for the account of a customer and not for its own account. Such regulations shall provide for the adequate segregation of obligations so held, including obligations which are purchased or sold subject to resale or repurchase.

(b)Violation of a regulation prescribed under subsection (a) shall constitute adequate basis for the issuance of an order under section 5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)),section 8(b) or 8(c) of the Federal Deposit Insurance Act, section 5(d)(2) or 5(d)(3) [1] of the Home Owners’ Loan Act of 1933, section 407(e) or 407(f) [1] of the National Housing Act, or section 206(e) or 206(f) of the Federal Credit Union Act. Such an order may be issued with respect to a depository institution by its appropriate regulatory agency and with respect to a federally insured credit union by the National Credit Union Administration.

(c)Nothing in this section shall be construed to affect in any way the powers of such agencies under any other provision of law.

(d)The Secretary shall, prior to adopting regulations under this section, determine with respect to each appropriate regulatory agency and the National Credit Union Administration Board, whether its rules and standards adequately meet the purposes of regulations to be promulgated under this section, and if the Secretary so determines, shall exempt any depository institution subject to such rules or standards from the regulations promulgated under this section.

(e)As used in this subsection—

(1)“depository institution” has the meaning stated in clauses (i) through (vi) of section 19(b)(1)(A) of the Federal Reserve Act and also includes a foreign bank, an agency or branch of a foreign bank, and a commercial lending company owned or controlled by a foreign bank (as such terms are defined in the International Banking Act of 1978).

(2)“government securities broker” has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act of 1934.

(3)“government securities dealer” has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act of 1934.

(4)“appropriate regulatory agency” has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange Act of 1934.

Section 3(a)(34)(G), (42)(B), (C), (43), (44) of the Securities Exchange Act of 1934, referred to in subsecs. (a) and (e)(2)–(4), is classified to section
78c(a)(34)(G), (42)(B), (C), (43), (44) of Title
15, Commerce and Trade.

Section 8(b) or 8(c) of the Federal Deposit Insurance Act, referred to in subsec. (b), is classified to section
1818(b), (c) of Title
12, Banks and Banking.

Section 5(d)(2) or 5(d)(3) of the Home Owners’ Loan Act of 1933, referred to in subsec. (b), is classified to section
1464(d)(2), (3) of Title
12, but was amended generally by Pub. L. 101–73, title III, § 301,Aug. 9, 1989, 103 Stat. 282, and no longer relates to issuance of orders. See section
1464(d)(1) of Title
12.

Section 407 of the National Housing Act, referred to in subsec. (b), which was classified to section
1730 of Title
12, was repealed by Pub. L. 101–73, title IV, § 407,Aug. 9, 1989, 103 Stat. 363.

Section 206(e) or 206(f) of the Federal Credit Union Act, referred to in subsec. (b), is classified to section
1786(e), (f) of Title
12.

Clauses (i) through (vi) of subparagraph [section] 19(b)(1)(A) of the Federal Reserve Act, referred to in subsec. (e)(1), are classified to section
461(b)(1)(A)(i) to (vi) of Title
12.

Section effective 270 days after Oct. 28, 1986, except that the Secretary of the Treasury and each appropriate regulatory agency shall publish for notice and public comment within 120 days after Oct. 28, 1986, initial implementing regulations to become effective as temporary regulations 210 days after Oct. 28, 1986, and as final regulations not later than 270 days after Oct. 28, 1986, see title IV of Pub. L. 99–571, set out as a note under section
78o–5 of Title
15, Commerce and Trade.